GMG Airlines' plans to fly to Saudi Arabia has been blocked by state-owned Biman that has refused to allow the country's largest private carrier to use its idle landing rights to the lucrative Middle East destination.
The move has forced GMG to slash its 2008 turnover forecast by 37 percent to Tk 850 crore from Tk 1,350 crore, with the company warning that rocketing fuel prices may further force it to scale back its targets.
National carrier, Biman Bangladesh Airlines, has the right to land 13 times a week in Saudi Arabia, but has only ten flights a week, leaving three slots idle. Previously the government indicated that it would distribute unused rights to other Bangladeshi carriers.
However, Biman has objected to give up any of its slots, claiming it will use them all later this year by adding additional flights to the kingdom.
Saudi Arabia is an important route as it is the number one destination for Bangladeshi workers.
"It's unfortunate. It would have been easier for us to reach our turnover target if we could fly to Saudi Arabia," said Abdus Sattar, chairman of GMG Airlines, recording a turnover between Tk 60-70 crore a month now.
In 2007 GMG's turnover reached Tk 280 crore.
The GMG chairman said the carrier projected its turnover for 2008 based mainly on two routes, UAE and Saudi Arabia.
“We forecast the turnover based on mainly two new routes, but we have only got one,” he said.
With seven aircraft in its fleet, the oldest private carrier GMG started flights to Dubai in February 2008 as its seventh international destination. But it is yet to bag a good number of passengers because of a poor response in return flights and frequent flight delays due to technical glitches.
The GMG chairman said the route is yet to become profitable.
The airline has downsized its turnover expectation at a time when airlines across the globe are worried about losses due to the consistent surges in fuel prices, hitting close to $140 per barrel, early this week.
In Bangladesh, all five local airlines, including the three new carriers who recently entered the market to exploit a slice of about 7.5 percent growth in air traffic a year, are also in trouble due to fuel price increases, the burden of which has been passed onto the passengers. The airlines apprehended that it might negatively affect passenger flow.
The Saudi routes shared by Biman and Saudi Arabia Airlines, provides Biman with a steady revenue flow at about 2.5-3 lakh passengers, traveling between Bangladesh and Saudi Arabia.
The national carrier, which had earlier signed a $1.265 billion deal with Boeing for acquiring 8 aircraft, is unwilling to share its prime market on the ground that it would hurt its earning at a time when it is going to strengthen its fleet.
“We want to utilise all our frequencies within a short time,” said a senior official of Biman.
Sattar said, “They would have to wait till September to see whether Biman utilises their slots. If Biman does not utilise their slots at that time, we may get it.”
The carrier now plans to start flights on some new destinations, Karachi, Kuwait, Muscat, Abu Dhabi and Doha, despite problems such as delays and cut in flights.
"We expect an additional Tk 10 crore in monthly turnover by flying on these destinations," the chairman said.
He said GMG would expand its routes after adding a leased aircraft.
Since its inception in 1998, the GMG Airlines initially operated flights only on domestic routes for six years and later got permission to operate on international routes in 2004.
Source: the Daily Star dated 16-08-2008
The move has forced GMG to slash its 2008 turnover forecast by 37 percent to Tk 850 crore from Tk 1,350 crore, with the company warning that rocketing fuel prices may further force it to scale back its targets.
National carrier, Biman Bangladesh Airlines, has the right to land 13 times a week in Saudi Arabia, but has only ten flights a week, leaving three slots idle. Previously the government indicated that it would distribute unused rights to other Bangladeshi carriers.
However, Biman has objected to give up any of its slots, claiming it will use them all later this year by adding additional flights to the kingdom.
Saudi Arabia is an important route as it is the number one destination for Bangladeshi workers.
"It's unfortunate. It would have been easier for us to reach our turnover target if we could fly to Saudi Arabia," said Abdus Sattar, chairman of GMG Airlines, recording a turnover between Tk 60-70 crore a month now.
In 2007 GMG's turnover reached Tk 280 crore.
The GMG chairman said the carrier projected its turnover for 2008 based mainly on two routes, UAE and Saudi Arabia.
“We forecast the turnover based on mainly two new routes, but we have only got one,” he said.
With seven aircraft in its fleet, the oldest private carrier GMG started flights to Dubai in February 2008 as its seventh international destination. But it is yet to bag a good number of passengers because of a poor response in return flights and frequent flight delays due to technical glitches.
The GMG chairman said the route is yet to become profitable.
The airline has downsized its turnover expectation at a time when airlines across the globe are worried about losses due to the consistent surges in fuel prices, hitting close to $140 per barrel, early this week.
In Bangladesh, all five local airlines, including the three new carriers who recently entered the market to exploit a slice of about 7.5 percent growth in air traffic a year, are also in trouble due to fuel price increases, the burden of which has been passed onto the passengers. The airlines apprehended that it might negatively affect passenger flow.
The Saudi routes shared by Biman and Saudi Arabia Airlines, provides Biman with a steady revenue flow at about 2.5-3 lakh passengers, traveling between Bangladesh and Saudi Arabia.
The national carrier, which had earlier signed a $1.265 billion deal with Boeing for acquiring 8 aircraft, is unwilling to share its prime market on the ground that it would hurt its earning at a time when it is going to strengthen its fleet.
“We want to utilise all our frequencies within a short time,” said a senior official of Biman.
Sattar said, “They would have to wait till September to see whether Biman utilises their slots. If Biman does not utilise their slots at that time, we may get it.”
The carrier now plans to start flights on some new destinations, Karachi, Kuwait, Muscat, Abu Dhabi and Doha, despite problems such as delays and cut in flights.
"We expect an additional Tk 10 crore in monthly turnover by flying on these destinations," the chairman said.
He said GMG would expand its routes after adding a leased aircraft.
Since its inception in 1998, the GMG Airlines initially operated flights only on domestic routes for six years and later got permission to operate on international routes in 2004.
Source: the Daily Star dated 16-08-2008
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